Where to take out a personal loan online

You can get a personal loan online without ever visiting a bank. Here’s where to get one, and some pros and cons to keep in mind. (Shutterstock)

Personal loans provide a fast and convenient way to borrow money. Many people get personal loans to consolidate high-interest credit card debt or cover large expenses like home repairs, weddings, funerals, medical bills, and vacations.

Online personal loans offer a completely digital process, from application to approval. And you can typically receive your loan funds from an online lender more quickly than a personal loan from a brick-and-mortar financial institution. 

Here’s where to get an online personal loan, how long it takes to receive your funds, and the qualifications you’ll typically need to meet.

• Where to get an online personal loan
• Pros of applying for personal loans online
• Cons of applying for personal loans online
• How long will it take to fund your online personal loan?
• What do you need to qualify for a personal loan online?

Where to get an online personal loan

It’s very common to apply and get approved for a personal loan entirely online. While some traditional banks and credit unions require applicants to apply for a loan in person, many online lenders streamline the application process for those who prefer doing business on their computer or mobile device. 

You can get an online personal loan by filling out an application on the website of virtually any lender you’re considering. Loan amounts can range anywhere from $1,000 to $100,000, with repayment terms between two and five years (or longer). 

As you compare lenders to find the best personal loan for your needs, consider the loan amounts, interest rates, and monthly payment amounts. Ideally, you’ll find a personal loan with the lowest rate that meets your financial needs with a monthly payment you can afford.

Credible makes it easy to compare personal loan rates from various online lenders, all in one place.

Pros of applying for personal loans online

As with any financial decision, it’s smart to weigh the pros and cons of online personal loans. The advantages of online personal loans include:

• Prequalification — Online lenders typically offer you the chance to prequalify for personal loans, which involves a soft credit inquiry. That means you can compare loan offers without affecting your credit score.
• Convenience — Online lenders offer an application process you can complete entirely online. By contrast, some banks and credit unions accept applications online, but many still require you to go to a branch office to submit your loan application or sign your loan documents.
• Fast funding — Online lenders tend to have quick turnaround times on their personal loans. Many lenders can deposit the funds into your bank account the same day or within one business day after approving your application.

Cons of applying for personal loans online

Digital-only loans also have some downsides worth considering:

• No in-person customer service — If you get a personal loan with an online lender, your customer support will typically be through phone, email, or chat support. You won’t be able to visit a physical office to resolve any issues pertaining to your loan. If you choose an online lender, you should be comfortable doing business online and managing your loan with little personal interaction.
• Your bank may have a better offer — Online lenders often have the best deals on personal loans simply because they don’t have the high financial overhead of traditional banks that must operate their brick-and-mortar locations. However, a bank or credit union may offer you a better deal, particularly if you already have an established relationship. Again, it pays to get as many quotes as possible to find the best deal that suits your needs.

How long will it take to fund your online personal loan?

If you need immediate access to money, an online lender could be a viable option. You can usually complete the application process in a few minutes. And depending on the lender, you may receive a decision immediately and receive funds to your account within five business days.

Many online lenders offer even faster funding. For example, Prosper aims to fund your loan within one business day, while LightStream may distribute your funds the same business day. (Both Prosper and LightStream are Credible partners.) 

Ensure your application doesn’t hit any snags by having your supporting documents handy when you apply.

What do you need to qualify for a personal loan online?

Every lender is different when it comes to the information you’ll need to provide on your application. Generally, you’ll need to share some basic information such as your name, contact information, and date of birth. You’ll likely have to provide the following additional documentation to qualify for a personal loan:

• Proof of identity — Be prepared to share your state-issued ID to prove you’re a U.S. citizen and at least 18 years old. Acceptable forms of ID typically include a driver’s license, identification card, birth certificate, certificate of citizenship, Social Security number, or military ID.
• Proof of address — Lenders often require proof of your address to help them assess the stability of your living situation. A utility bill, voter registration card, rental agreement, or mortgage statement should suffice.
• Proof of income or employment — Lenders typically want to see proof of employment or income to ensure you have the means to repay your loan. You may need to submit verification in the form of your most recent pay stubs, tax returns, W-2s, or bank statements. If you’re self-employed, be prepared to share a current bank statement, 1099s, or income tax returns.

If the lender approves your application, take the necessary time to review the terms and conditions for the loan, including the interest rate, any fees, and the repayment period. It may be tempting to sign the loan agreement immediately to access the loan funds faster, but it’s critical you understand the terms and fees before signing on the dotted line. 

If you’re ready to apply for a personal loan online, visit Credible to quickly and easily compare personal loan rates to find one that best suits your needs.

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